Analytical company CRISIL on Saturday said a decisive mandate given in the Lok Sabha elections should embolden the next government to take hard decisions on its finances by cutting subsidies and curbing wasteful expenditure.

The decisive mandate has created the best environment in a long time to bite the bullet on government finances to ensure a long and healthy phase of economic growth in India.

It asked the government to go for fiscal consolidation by ensuring the money spent on social welfare schemes created durable assets and did not just remain cash handouts.

In the interim Budget, the Centre#39;s fiscal deficit was projected to come down to 4.1 per cent in the current financial year from 4.6 per cent estimated for the previous year. The estimates may be revised in the full Budget to be presented by the next government later.

Chief Executive and Managing Director Roopa Kudva said, The lowest-hanging fruit are fast-tracking of projects in the pipeline and resolving iron-ore and coal-mining issues. This will improve the efficiency of capital now stuck, pave the way for better returns on investment, create jobs, lift income growth and spur private consumption demand.

It said the government should tame inflation, give boost to manufacturing, improve asset quality of banks and bolster corporate debt markets to put India on growth path of 6.5-seven per cent in the medium term.

The firm said, Typically, monetary (cut in interest rates) and fiscal instruments (increase in government spending) are used to prop a sagging economy in the short run. But India has run out of such counter-cyclical policy ammunition as its inflation and deficits remain high and need to be trimmed.